In Oldcastle Building Products Canada Inc. v. Division 8 Consulting Corp., 2026 BCCA 223, the BC Court of Appeal dealt with a narrow, but important procedural question: whether the limitation period for commencing a third-party claim under the BC Limitation Act is satisfied by filing an application for leave or whether the Third Party Notice must itself be filed before the limitation period expires.

The Decision Below

The underlying action involved construction defects allegations by a strata corporation against various parties, including Oldcastle. Division 8 was a subcontractor retained for engineering and design work. Oldcastle sought to pursue a third party claim against Division 8 for contribution and indemnity in the action.

Division 8 applied to strike the Third Party Notice filed by Oldcastle. The main issue on the application before the chambers judge was when a third party claim for contribution or indemnity was considered to be “commenced”, thereby stopping the time from running on the applicable time period.

A. Procedural History

Oldcastle was served with the plaintiff’s claim in August 2018. During the COVID-19 pandemic, BC implemented a temporary suspension of limitation periods, whereby a one-year suspension was added to the calculation before determining that a claim was statute-bar. Thus, Oldcastle had until August 2021 to commence its third party claim against Division 8.

Before the limitation period expired, Oldcastle applied for leave of the court to file a third-party claim against Division 8. However, a hearing date was not scheduled until September 9, 2021, which was after the expiry of the limitation period to file the Third Party Notice. For this reason, the parties entered into a tolling agreement suspending the running of the limitation period to the earliest of the date of the hearing or September 30, 2021.

Following the September 2021 hearing, the court granted leave to Oldcastle to file its Third Party Notice against Division 8. The parties drafted an order, but disagreed over the wording of the order. The parties exchanged correspondence over this issue, with the last email of the exchange being in mid-November 2021 from Division 8.

On June 28, 2022, Division 8 wrote to Oldcastle, indicating that the Third Party Notice had not been filed in accordance with the terms of the September 2021 order, and that the limitation period had now expired. Oldcastle responded several weeks later advising that the Third Party Notice had been filed on June 14, 2022.

B. Parties’ Positions

Division 8 applied to strike Oldcastle’s Third Party Notice, taking the position that the third-party claim was statute barred, having been filed long after the limitation date expired.

Oldcastle argued that the third-party claim was not statute barred because the Notice of Application seeking leave to file it was filed long before the limitation period expired.

C. Supreme Court Decision

The chambers judge agreed with Division 8 and set aside the Third Party Notice filed by Oldcastle. It its reasons, the Court highlighted that section 22(2) of the Limitation Act removes any ability to commence a third party claim for contribution and indemnity after the applicable limitation period has expired. In addition, the Court held that a “court proceeding” for the purposes of section 22(2) refers to an originating process, which includes a third-party claim, and the Third Party Notice is the document that commences the proceeding.

Therefore, filing a leave application does not stop the limitation clock. In order to preserve a contribution and indemnity claim, the defendant must actually file a Third Party Notice.

The BC Court of Appeal Decision

Oldcastle appealed the ruling of the BC Supreme Court, challenging the judge’s interpretation of “to commence a court proceeding” in section 22(2) of the Limitation Act as requiring the actual filing of the Third Party Notice to commence the claim.

In essence, Oldcastle argued that:

1. The chambers judge analyzed “to commence a court proceeding” in section 22(2) of the Limitation Act too narrowly, and that where the rules require leave before a Third Party Notice can be filed, “commencing a court proceeding” should include bringing the leave application because that is the only procedural step available to the party before the Third Party Notice can be filed;

2. The chambers judge’s interpretation was inconsistent with existing case law;

3. The judge’s interpretation creates uncertainty and unfair results because a defendant had no control over when an application is heard or decided, making the preservation of a claim dependent on court scheduling.

The Court of Appeal was not persuaded and rejected Oldcastle’s arguments.

With respect to Oldcastle’s first argument, the Court undertook a modern statutory interpretation analysis by looking at the text of s. 22(2) of the Limitation Act, the purpose of the Act and the context of the Supreme Court Civil Rules. The Court concluded that claims for contribution and indemnity are commenced by a Third Party Notice, not by a Notice of Application seeking leave to file a Third Party Notice because the leave application is simply a request for permission. In other words, asking for permission to sue is not the same thing as suing, and therefore, a leave application cannot commence a third-party claim because it does not assert the claim itself.

The Court also explained that if Oldcastle’s argument was accepted, that would mean that a party could simply start a claim without actually suing anyone yet and the limitation period would be satisfied by a procedural step that does not assert any claim – this is inconsistent with the certainty and finality the Limitation Act is intended to promote.

Further, the Court confirmed that there is no free-standing common law principle that a timely leave application will preserve a limitation period whenever leave is required and the authorities relied on by Oldcastle arose in different statutory and procedural contexts.

Lastly, with respect to the uncertainty and unfairness argument, the Court held that parties who require leave to issue a third-party claim must account for the limitation period, and where necessary, bring their leave applications sufficiently early to obtain an order and file the Third Party Notice

before the limitation period expires. The Court’s role is to interpret and apply the legislation, as enacted, and not to create an exception to the limitation period based on perceived unfairness.

In conclusion, the Court of Appeal agreed with the chambers judge’s decision and dismissed the appeal.

Key Takeaways

1. A proposed third-party claim becomes the subject of a legal claim when the Third Party Notice is filed;

2. Limitation periods are strictly enforced – a party cannot assume that taking a procedural step, such as filing an application for leave, will preserve its claim;

3. Plan ahead if leave is required to issue a third-party notice. Counsel should bring the application well before the limitation period expires; waiting until the last minute creates a risk that the limitation period will expire before the actual Notice can be filed;

4. Counsel should ensure that post-hearing steps, including settling terms of orders, are completed expeditiously to avoid jeopardizing limitation dates; and

5. Procedural rules facilitate litigation, but do not modify or suspend statutory limitation periods set out in legislation.

Ultimately, this decision serves as a reminder that in British Columbia construction and insurance litigation, successful third-party claims depend not only on their merits, but also on strict compliance with statutory limitation periods and proper statutory interpretation.

Implications for Alberta Litigation?

The practical impact is unlikely to be the same in Alberta due to differences in both, procedural and limitation legislation. First, following the decision in Whitecourt Power Limited Partnership v Elliott Turbomachinery Canada Inc, 2015 ABCA 252, the limitation period for claims for contribution and indemnity is governed by s. 3(1.1) of the Alberta Limitations Act which sets out a 2 year discoverability period or 10 year ultimate limitation period, whichever occurs first, beginning no earlier than service of the plaintiff’s claim.

Second, section 6(4) of the Alberta Limitations Act may permit otherwise time-barred claims to be added where they arise from the same conduct and where notice and prejudice requirements are satisfied.

Lastly, Rule 3.45 of the Alberta Rules of Court imposes a procedural requirement that a third-party claim generally be filed and served within six months of the filing of a Statement of Defence; however, the Rule does not require a defendant to obtain leave merely because the six months have elapsed, and this timeline is characterized more as procedural rather than a true limitation period.

In short, the specific commencement principle emphasized in Oldcastle is unlikely to have the same limiting effect in Alberta practice where limitations and procedural timelines operate on distinct statutory footing.